You have to accept All or at least the Functionality cookies to be able to use our website. Thank you!

Functionality cookies

Always On

These cookies are necessary for the website to function and cannot be switched off. They are being used to manage layers, pop-ups and other information for the user, store and execute specific trading conditions for partners and clients, that applied for specific offer or show different content according to the location of the user.

Laravel

Other Cookies

Web Analytics Cookies

On

These cookies gather information that helps us to understand interactions with our website (visits, traffic sources, search queries, clicks, scrolling) and improve the user experience. All information these cookies collect is aggregated and therefore anonymous.

Google Analytics

Yandex Metrica

Targeting Cookies

On

These cookies help us making advertising more effective and show relevant ads that fits your interests. They can be also used to serve specific ads to users who've visited our website. They are being used for tailoring and measuring ads and specific actions on our website, f.i. newsletter-registration. They work by uniquely identifying your browser and device.

Google/DoubleClick

Facebook

Marketing Cookies

On

Used to record the source (publisher name), medium (creative type), campaign (advertising campaign name) and content (topic of the creative) of the client in order to assess it in our data base. Not being used for targeting purposes.

Monday appears to be a relatively light day in terms of economic data and releases. The only indicators worth mentioning are the German Ifo survey for June and the US new home sales for May. As for the Ifo survey, no forecasts are currently available for neither the expectations nor the current assessment indices. With regards to the US new home sales, expectations are for a 1.5% mom increase after a 1.5% slide in April.

Tuesday looks to be a quiet day as well. The most important item on the agenda is the US Conference Board consumer confidence index for June, which is expected to have remained unchanged at 128.0.

On Wednesday, during the Asian morning, we get New Zealand’s trade balance for May.

Later in the day, US durable goods orders for May are coming out. Expectations are for headline orders to have slid 0.6% mom after declining 1.6% in April. Something like that is likely to drive the yoy headline rate lower as the as the May 2017 monthly print that will drop out of the calculation was -0.1%. As for orders excluding transportation, they are expected to have slowed to +0.4% mom from +0.9%, which would drive the core yoy rate slightly lower. Having said that though, bearing in mind that the New Orders Sub-index of the ISM manufacturing PMI for May rose to 63.7 from 61.9, we view the risks surrounding the forecasts as tilted to the upside. The US pending home sales for May are also coming out and they are expected to have risen 0.6% mom after declining 1.3% in April.

On Thursday, during the Asian morning, the Reserve Bank of New Zealand will decide on monetary policy. This will be one of the “smaller” meetings that is not accompanied by updated economic projections, neither a press conference by Governor Adrian Orr. Expectations are for the Bank to keep interest rates unchanged at +1.75% and thus, if this is the case, we expect market attention to quickly turn to the accompanying statement.

When they last met, RBNZ officials decided to keep interest rates untouched as was widely anticipated, but in the accompanying statement, the new Governor noted that “The direction of our next move is equally balanced, up or down”. What’s more, in the quarterly Monetary Policy Statement, the Bank downgraded its inflation projections, and also pushed back the timing of when it expects interest rates to start rising. That timing was pushed from June 2019 to September 2019.

Since that gathering, the most important release we got was GDP for Q1. The release showed that economic growth slowed to +0.5% qoq from +0.6% in Q4 2017, which is below the Bank’s latest projections of +0.7% qoq for the quarter. Thus, we expect the Bank to keep the prospect of a rate cut on the table and repeat that the next move in rates could equally be up or down. As for the overall tone of the statement, it could be more or less the same as in May, or somewhat more dovish, given that economic growth stood below the Bank’s projections in the first three months of the year.

In Germany, we have the preliminary CPI data for June. Expectations are for inflation in Eurozone’s economic powerhouse to have slowed somewhat. Specifically, both the CPI and HICP rates are forecast to have ticked down to +2.1% yoy from +2.2% in May. Something like that could raise speculation that Eurozone’s headline inflation, due out on Friday, may move in a similar manner.

Later in the day, from the US, we get final GDP data for Q1. Expectations are for the final print to confirm the second estimate and show that the US economy grew +2.2% qoq SAAR in the first three months of 2018. However, even if we get a minor deviation from the 2nd estimate, we don’t expect a major market reaction. We are approaching the end of the 2nd quarter and thus, market participants are now likely to be more eager to find out how the economy performed during this quarter. There are models already hinting at how the economy performed in Q2. The Atlanta Fed GDPNow Model suggests that the economy accelerated to 4.7% qoq SAAR, while the New York Fed Nowcast points to a 2.9% qoq SAAR growth rate.

On the political front, the EU leaders’ two-day summit begins. Following the clash over migration between German Chancellor Angela Merkel and Horst Seehofer, her Minister of the Interior and also the leader of CSU, one of her coalition partners, the topic is likely to take center stage at this summit. The meeting also comes after US President Trump’s threat to impose 20% tariffs on EU cars and thus, trade could take a spot at the top of the agenda as well. With regards to Brexit, there is little expected from this summit. As other matters demand their attention, leaders may devote less time on Brexit this time.

On Friday, Asian time, we get Japan’s Tokyo CPIs for June. Both the headline and core rates are expected to have ticked up to +0.5% yoy and +0.6% yoy, from +0.4% and +0.5% in May respectively. The nation’s unemployment rate and preliminary industrial production, both for May are also coming out.

As for the European session, the final UK GDP for Q1 is coming out. Expectations are for the final print to confirm the second estimate and show that the UK economy slowed to +0.1% qoq from +0.4% in the last three months of 2017. That said, as with the US GDP data, we would treat this release as outdated. At its policy meeting last week, the BoE reiterated its optimism that the Q1 slowdown was temporary and noted that it expects economic growth to have rebounded to +0.4% qoq in the second quarter. Thus, we believe investors are likely to stay focused on data hinting at how the UK economy performed during that quarter in order to assess whether the Bank was right and whether it will indeed proceed with hiking rates in August.

From the Eurozone, we have the preliminary CPIs for June. Expectations are for the headline rate to have risen to +2.0% yoy from +1.9% in May, but the core rate is anticipated to have ticked down to +1.0% yoy from +1.1%. That said, given that the German headline inflation is forecast to have slowed somewhat, we see the risks surrounding the bloc’s headline print as tilted to the downside.

At its latest policy gathering, the ECB signaled a QE-tapering after September and a clear end to the program in December, but the decision was subject to incoming data. What’s more, the Bank noted that interest rates are expected to stay untouched “at least through the summer of 2019 and in any case for as long as necessary”, which came as a disappointment to those expecting a hike in mid-2019. In our view, the interest rate guidance means that rates are likely to start rising in September 2019 the earliest.

Although preliminary PMI data on Friday suggested that the Euro area economy may have started to turn the corner, we believe that accelerating inflation in both headline and core terms is needed for the case of a Sep-19 hike to strengthen. A slowdown is likely to come as a disappointment and may prompt investors to push their expectations somewhat back.

Later in the US, we have personal income and spending data for May, as well as the core PCE index for the month. Personal income is forecast to have accelerated to +0.4% mom from +0.3% in April, while spending is anticipated to have slowed to +0.4% mom from +0.6%. The case for accelerating income is supported by the rise in the monthly earnings rate for the month, but the pick-up in May’s retail sales suggest that the risks surrounding the spending forecast are tilted to the upside.

As for the yoy core PCE rate, the Fed’s preferred inflation measure, it is anticipated to have risen to +1.9% yoy from +1.8% in April. The case is supported by the core CPI rate for the month, which rose to +2.2% yoy from 2.1%.

At its latest meeting, the FOMC decided to increase the Federal funds rate by 25bps, while the new “dot plot” pointed for two more rate increases by year end, instead of just one as the previous plot suggested, as one of the policymakers who previously supported a total of three hikes in 2018 has changed his mind and called for four. Thus, an accelerating core PCE index would support the case for two more rate hikes by year end and may increase the chance for more Fed members to raise their dots at the September meeting.

From Canada, we get GDP data for April and expectations are for a slowdown to +0.1% mom from +0.3% in March. At its latest policy gathering, the BoC laid down the ground for a July hike, but a slowdown in GDP, combined with Friday’s disappointing CPI and retail sales data, is likely to bring the prospect of such a move into question.

Finally, on Saturday, during the Asian morning, China’s manufacturing and non-manufacturing PMIs for June are due to be released. The manufacturing PMI is forecast to have ticked down to 51.8 from 51.9 in May, while the non-manufacturing index is anticipated to have edged up to 55.0 from 54.9.

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.

FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.

Research

Legal

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of the retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Seek independent advice if necessary and review our Risk Disclosure and Privacy Policy before opening an account.

JFD Brokers Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission - CySEC (Licence number: 150/11) and is a Member of the Investor Compensation Fund (ICF). JFD Brokers Ltd is registered with the German Federal Financial Supervisory Authority - Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) (Registration number: 126399), the British Financial Conduct Authority - FCA (Registration number: 580193), the French Autorité de Contrôle Prudentiel et de Résolution - ACPR (Registration number 74013), the Italian Commissione Nazionale per le Società e la Borsa - CONSOB (Registration number 3317) and is MiFID II compliant under the Investment Services and Regulated Market Law of 2017 (Law number: 87(I)/2017). JFD Brokers Ltd is licensed to provide the investment services of Agency Only Execution (i.e. reception and transmission of orders, execution of orders on behalf of clients), Portfolio Management and Investment Advice in relation to Transferable Securities, Options, Futures, SWAPS, Forward Rate Agreements, Financial Contracts for Differences (CFD) and other Derivatives. JFD Brokers Ltd is also licensed to provide the ancillary service of Safekeeping and Administration of Financial Instruments. JFD Overseas Ltd is authorised and regulated by the Vanuatu Financial Services Commission with license number 17933 to carry on the business of dealing in securities, reception and transmission of orders in relation to one or more financial instruments; Execution of orders on behalf of clients; Portfolio management; Provision of investment advice; Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis in relation to Transferable Securities, Options, Futures, SWAPS, Forward Rate Agreements, Financial Contracts for Differences (CFD) and other Derivatives. JFD Overseas Ltd. is also licenced to provide the ancillary service of Safekeeping and Administration of Financial Instruments.

JFD Brokers offers its investment services to residents of France and Belgium only under the Company's MTF facilities. A restriction on offering investment services applies to residents of the United States of America, Russia, Japan and to residents of other countries whose domestic regulations classify such investment offering as prohibited.

To provide you with the best possible experience, this site uses cookies. By continuing to browse or by clicking "Accept All Cookies", you agree to the cookie usage. Find out more in our Privacy Policy.

More options

Accept All Cookies

Margin Trading is high risk and not suitable for all. Please ensure that you fully understand the risks involved.